[Federal Register Volume 61, Number 28 (Friday, February 9, 1996)]
[Notices]
[Pages 5031-5032]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-2766]
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DEPARTMENT OF JUSTICE
Drug Enforcement Administration
The Drugstore; Denial of Application
On June 22, 1994, the Deputy Assistant Administrator, Office of
Diversion Control, Drug Enforcement Administration (DEA), issued an
Order to Show Cause to The Drugstore, (Respondent) of Oak Grove,
Louisiana, proposing to deny its application, executed on January 23,
1993, for registration as a retail pharmacy under 21 U.S.C. 823(f), as
being inconsistent with the public interest. Specifically, the Order to
Show Cause alleged inter alia that David Nagem, the owner of the
Respondent company (Owner), (1) dispensed 11,850 various narcotic and
non-narcotic controlled substances without a valid physician's
authorization; (2) pled nolo contendere to charges brought by the
Louisiana State Board of Pharmacy (Louisiana Board) that he had
dispensed controlled substances without valid authorization and that he
was responsible for controlled substances shortages at the pharmacy
where he was employed; and (3) that he pled guilty to and was convicted
of two counts of illegal distribution of controlled substances on June
5, 1992. The order also notified the Respondent that, should no request
for a hearing be filed within 30 days, the hearing right will be deemed
waived. The DEA received a receipt from the United States Postal
Service showing that the order was delivered, and the receipt was
signed and dated June 27, 1994. However, no reply was received by the
DEA to the order.
Therefore, the Deputy Administrator concludes that the Respondent
is deemed to have waived its hearing right. After considering the
investigative file, the Deputy Administrator now enters his final order
in this matter without a hearing pursuant to 21 CFR 1301.54(e) and
1301.57.
The Deputy Administrator finds that the Owner submitted a DEA
application for registration as a retail pharmacy dated January 23,
1993, in the name of The Drugstore. In response to a question on this
application, the Owner wrote that his Louisiana pharmacy license ``was
taken from Jan[uary] 25, 1992[,] to July 25, 1992[,] for giving out
medicine (prescription) without proof of legal prescription from a
physician. David's [Louisiana] license was taken for 6 months, fine was
given & paid, and probation during [that] time.'' No other adverse
information or explanations were contained on the application.
DEA investigators researched the Owner's record in response to this
application, finding that the West Carroll Parish Sheriff's Office
(Sheriff) had conducted an investigation of the Owner after receiving
information from a confidential source that he was dispensing
controlled substances without prescriptions. The Sheriff found that,
while the Owner was employed at the West Carroll Memorial Hospital
Pharmacy, Oak Grove, Louisiana, he had dispensed, inter alia, Tylenol
No. 3 and No. 4, and Darvocet without prescriptions authorized by a
physician, to two individuals over a timeframe spanning January 1990
through January 1992. Also, between September 1990 through February
1992, he had dispensed controlled and non-controlled substances,
including Xanax, Restoril, and Tylenol No. 4, to six other individuals
without a physician-authorized prescription. Darvocet is a brand name
for a substance containing propoxyphene napsylate, a Schedule IV
controlled substance, Tylenol No. 3 and No. 4 are Schedule III
controlled substances, Restoril is the brand name for a substance
containing temazepam, a Schedule IV controlled substance, and Xanax is
a brand name for a substance containing alprazolam, a Schedule IV
controlled substance. As a result of this conduct, the Louisiana Board
charged the Owner with five counts of violating Louisiana law by
engaging in conduct which endangered the public health, by dispensing
unauthorized Schedule III and IV controlled substances, and by
violating audit shortage provisions of State law. On April 22, 1992, a
hearing was held, the Owner entered a nolo contendere plea, and the
Board ordered that the Owner's pharmacist's license be suspended for 60
months, actively for 3 months, and on probation for 57 months.
On June 8, 1992, the Owner entered a guilty plea in the Fifth
Judicial District Court, Parish of West Carroll, Oak Grove, Louisiana,
to two counts of unlawful distribution of drugs in violation of
Louisiana law. The court accepted his plea and sentenced him to pay a
total of $7,500.00 in fines. The Owner did not disclose this conviction
on his DEA application.
On February 12, 1993, the Louisiana Board voided the Owner's
application for a pharmacy permit for the Drugstore, concluding that
the application was no longer active.
Pursuant to 21 U.S.C. 823(f) and 824(a)(4), the Deputy
Administrator may deny an application if he determines that the DEA
registration would be inconsistent with the public interest. Section
823(f) requires that the following factors be considered:
(1) The recommendation of the appropriate State licensing board or
professional disciplinary authority.
(2) The applicant's experience in dispensing, or conducting
research with respect to controlled substances.
(3) The applicant's conviction record under Federal or State laws
relating to the manufacture, distribution, or dispensing of controlled
substances.
(4) Compliance with applicable State, Federal, or local laws
relating to controlled substances.
(5) Such other conduct which may threaten the public health or
safety.
These factors are to be considered in the disjunctive; the Deputy
Administrator may rely on any one or a combination of factors and may
give each factor the weight he deems appropriate in determining whether
a registration should be revoked or an application for registration
denied. See Henry J.
[[Page 5032]]
Schwarz, Jr., M.D., Docket No. 88-42, 54 FR 16422 (1989).
In this case, all five factors are relevant in determining whether
the Respondent's application should be denied as being inconsistent
with the public interest. As to factor one, ``recommendation of the
appropriate State licensing board,'' the Louisiana Board voided the
Owner's pharmacy application for The Drugstore as being inactive.
Further, the Board also suspended and placed on probation the Owner's
pharmacy license as a result of finding that the Owner's conduct in
1990 through 1992 violated state controlled substances laws.
As to factor two, the Owner's ``experience in dispensing * * *
controlled substances,'' factor three, the Owner's ``conviction
record,'' and factor four, the Owner's ``[c]ompliance with applicable
State, Federal, or local laws relating to controlled substances,'' the
Owner admitted that he had dispensed controlled and non-controlled
substances without prescriptions on numerous occasions in 1990 through
1992. He was convicted in June of 1992 of unlawful distribution of
drugs in violation of Louisiana law.
As to factor five, ``[s]uch other conduct which may threaten the
public health or safety,'' the Owner failed to note his conviction on
his DEA application in violation of the requirements established by 21
U.S.C. 824(a)(1). It has been previously noted that material
falsification of an application, although not expressly mentioned under
Section 823 as it is under Section 824, is an appropriate action to
consider under factor five. See Robert L. Vogler, Docket No. 92-87, 58
FR 51385 (1992). The appropriate test for determining whether the
Respondent had materially falsified any application is whether the
Respondent ``knew or should have known'' that he submitted a false
application. See Bobby Watts, M.D., 58 FR 46995 (1993); accord Herbert
J. Robinson, M.D., 59 FR 6304 (1994). Here, the Owner was convicted in
June of 1992, and he submitted his registration application in January
of 1993. The specific question asked whether the ``applicant [had] ever
been convicted of a crime in connection with controlled substances
under State or Federal law.'' Thus, in preparing the application, the
Owner ``knew or should have known'' that the question sought
information about convictions and that he had been convicted. Yet he
did not disclose that information as required.
As for mitigating information, the Deputy Administrator notes that
the Respondent pled guilty to the charges against him, and in a letter
to the Louisiana Board, he acknowledged his misconduct and stated
remorse for his actions. However, the Owner has failed to provide any
information or evidence, such as attendance at remedial courses or
evidence of other corrective action taken, to assure that his future
conduct would comply with Federal and State law governing the
dispensing of controlled substances. The Owner's failure to respond to
the Order to Show Cause, either by requesting a hearing or by
submitting a written statement, indicates that he is either unwilling
or unable to proffer support for this application. Therefore, the
Deputy Administrator finds that the public interest is best served by
denying the Respondent's application at this time, for the Owner's past
conduct demonstrates that he cannot be entrusted with a DEA Certificate
of Registration as an owner of a retail pharmacy.
Accordingly, the Deputy Administrator of the Drug Enforcement
Administration, pursuant to the authority vested in him by 21 U.S.C.
823 and 824, and 28 CFR 0.100(b) and 0.104, hereby orders that The
Drugstore's application for a DEA Certificate of Registration as a
retail pharmacy be, and it hereby is, denied. This order is effective
March 11, 1996.
Dated: February 5, 1996.
Stephen H. Greene,
Deputy Administrator.
[FR Doc. 96-2766 Filed 2-8-96; 8:45 am]
BILLING CODE 4410-09-M
